Organizations looking for clarity on joint employer issues—from wage and hour classification to unionization—got a first look recently at where the Trump administration intends to steer the topic.
The U.S. Department of Labor on April 22 unveiled its proposed joint employer status rule, a closely watched area where regulations have been upended several times between the Biden and Trump administrations.
The latest proposal, according to the DOL, pursues a “single, nationwide standard” to guide decision-making related to joint employment—when two or more entities could be considered to employ the same worker, a question that arises in franchise, staffing agency and outsourcing arrangements, for instance.
The proposal sets forth that employment decisions be based primarily on four factors, including whether the organization is responsible for hiring and firing the employee; manages work schedule and employment conditions “to a substantial degree”; sets pay; and maintains the employee’s records. The DOL cautioned that other factors can be considered, but a unanimous finding on these four would suggest a “substantial likelihood” to inform the joint employment assessment.
The rule would apply to decisions under the Fair Labor Standards Act, Family and Medical Leave Act and Migrant and Seasonal Agricultural Worker Protection Act.
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This week’s proposal largely resurrects the joint employer rule issued in the first Trump administration, with an emphasis on whether the employer demonstrates it has “actual” control over the worker. It was largely criticized by worker advocates, who contended the provision that control had been exercised shifted liability unnecessarily away from larger corporations and onto partners and franchisees.
Much of that rule was vacated in court, and the Biden administration officially rescinded it in its entirety in 2021.
The shift back to the previous policy is in concert with the Trump administration’s push toward more employer-friendly regulations.
In a statement, Acting Secretary of Labor Keith Sonderling said the move supports the administration’s efforts to simplify “compliance for American employers and strengthen protections to put American workers first.”
“A clear standard on joint employment would give businesses more confidence to invest in partnerships, help employees understand their rights and make the department’s investigations more efficient,” Sonderling said.
Sonderling—a former EEOC commissioner and frequent speaker at the HR Tech conference—took on an elevated role this week after DOL Secretary Lori Chavez-DeRemer resigned amid a reported internal investigation regarding potential misconduct.
The public can comment on the proposed joint employer rule until June 22.
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